For many of the most critical computing jobs at DuPont Co., nothing but engineering workstations would do. Speed, crisp graphics, and built-in networking made them ideal for analyzing lab data, managing inven-

tory, and preparing documents, all of which made DuPont a showcase account for workstation leader Sun Microsystems Inc. But the show may be over: The chemical giant now thinks off-the-shelf personal computers are powerful enough to consider for some of those jobs. Says David A. Pensak, a DuPont consultant: "I can get the fastest PC for less than I can get anybody's workstation."

DuPont is not alone. A new generation of ultrafast PCs based on Intel Corp.'s Pentium microprocessor--and forthcoming IBM and Apple Computer Inc. models based on the PowerPC chip--is making corporate customers think twice about workstations. While workstation sales growth in 1993 slowed to 6.3%, to $10.3 billion (chart), the huge PC market grew by 10.8%, to $69.8 billion, says market researcher International Data Corp. A lot of that growth came from the red-hot home-computer market. But, increasingly, top-end PCs are squeezing workstation makers. Dataquest Inc. predicts that some 20% of the Pentium PCs sold this year will be used for workstation applications. "1994 is the year you see PC vendors really pushing into the traditional workstation market," says IDC analyst Nancy Battey.

ON GUARD. So instead of invading the huge, general-purpose desktop computer market--as they have long boasted they would--workstation makers are on the defense. On Jan. 18, Hewlett-Packard Co. unveiled a workstation for $3,995. In February, Digital Equipment Corp. and Sun will weigh in with sub-$4,000 workstations. And in March, the lines will blur even more as IBM and DEC release PC-like models in the $3,000 range that use RISC (reduced instruction-set computing) microprocessors--a workstation mainstay.

That's quite an onslaught, but it may not be much against the wave of Pentiums. Intel expects to ship at least 6 million Pentium chips in 1994. The whole workstation market is just 600,000 units a year. And each of the Pentium machines can run all the software for existing PCs as well as Microsoft's Windows NT, an operating system with some of the features of Unix, the powerful software used to run workstations. Concedes Jay Puri, vice-president for product marketing at Sun's hardware unit: "It's going to be tough out there."

BRIGHT SPOTS. That doesn't mean workstations are headed for oblivion anytime soon. They still offer unbeatable performance for designing chips and running networks, for instance. By grabbing customers who are moving off mainframes and minicomputers--and stealing market share from workstation rivals--some suppliers are still growing fast. HP's workstation sales grew 24% and Silicon Graphics Inc.'s 29% last year. Even Sun, which was slowed by troubles producing a new chip, grew 12% in 1993. Dragging down the average: DEC, NeXT, Intergraph, Sony, and NEC.

The critical market for workstation makers now will be corporate number-crunchers: workers who analyze complex market data, process insurance claims, and track orders, for example. Market researcher Summit Strategies figures powerful machines--both Pentium PCs and workstations--for such jobs will claim 20% of the desktop market by 1998, from 3% today.

If workstation makers can't spread out to new markets in 1994, their prospects will dim considerably. Despite ambitions to conquer corporate desktops, workstation makers have made little progress, mainly because they failed to agree on a single version of the Unix operating system and a common "user interface"--without uhich they could not attract the masses of software available for the personal computer. Now, their best hope may be to hold the line against PCs. Says Summit Strategies analyst Thomas Kucharvy: "This is their last chance."

Part of the battle will be internal. Companies will need to cut costs as they slash prices to stay in line with the PC makers. Sun has led the way by sharing chip-development costs with partners Fujitsu and Texas Instruments and farming out service to Eastman Kodak. Workstation companies are also cutting costs by selling more through dealers, rather than via direct-sales forces.

Just as critical will be better software. The big breakthrough in 1993 was an agreement by top suppliers to make their Unix versions look and work alike. Reaching out to Microsoft will help, too: Digital Equipment has licensed Windows NT for its workstations, and the chip in Hewlett-Packard's new workstation was designed to run PC programs--someday. Sun recently started selling software that operates Windows programs on Unix machines.

PC-PROOF? The best chance for workstation makers may be investing the fruits of their still-higher profit margins in new markets where personal computers can't easily follow. Promising ones include customer service and marketing data analysis--jobs that require powerful hardware and sophisticat-

ed programming. At American Telephone & Telegraph Co.'s Universal Card Service unit in Jacksonville, Fla., 2,000 customer representatives now use Sun workstations to call up images of invoices and other information. "I still don't believe we can find the software we need on PCs," says AT&T Universal Vice-President Leslie Palmer.

But that window of opportunity won't last long. Unix software companies such as Objectivity Inc., which wrote programs for Sun, HP, DEC, IBM, and Silicon Graphics, are already hard at work on NT versions. Says Martin Sayer, manager of advanced system product planning for Dell Computer Corp.: "We're certainly going to make it tough on the classical workstation vendor. I believe this is the year."

For some customers, the collision of PCs and workstations is a nonevent. "We don't try to differentiate between PCs and workstations anymore," says Hugh Ryan, managing partner at systems integrator Andersen Consulting. Unless workstation makers can do that for him once more, their market may never heat up again.

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